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Foreign Capital in Latin America in the Nineteenth and Twentieth Centuries

53 Pages Posted: 27 Mar 2003 Last revised: 1 Nov 2010

Alan M. Taylor

University of California, Davis - Department of Economics; University of Virginia - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Date Written: March 2003

Abstract

This paper examines the history of foreign investment in Latin America in the two centuries since independence. Investment flows to the region were sometimes large and always volatile. Symptoms of overborrowing, sudden stops, debt, default and crises have been evident from the beginning. In general the economies in the hemisphere struggled for most of the nineteenth century to develop reputations for macroeconomic stability and sound finance, and foreign capital was thus repelled for the long periods. In the twentieth century, most of the region, like the rest of the world, turned inward and against foreign capital markets, a policy trend that emerged in the interwar period and has only recently begun to reverse. These historical perspectives shed light on the region's current relative isolation and its future economic challenges.

Suggested Citation

Taylor, Alan M., Foreign Capital in Latin America in the Nineteenth and Twentieth Centuries (March 2003). NBER Working Paper No. w9580. Available at SSRN: https://ssrn.com/abstract=389451

Alan M. Taylor (Contact Author)

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